\u3000\u30 Beijing Telesound Electronics Co.Ltd(003004) 54 Sangfor Technologies Inc(300454) )
Event:
The company released its annual report for 2021. In 2021, the company achieved a total operating revenue of 6.805 billion yuan, a year-on-year increase of 24.67%, and the net profit attributable to the parent was 273 million yuan, a year-on-year decrease of 66.29%, including 131 million yuan after deduction, a year-on-year decrease of 80.66%.
Comments:
1. The performance notice is in line with the expected upper limit of revenue
According to the performance forecast of 2021 previously released by the company, the performance of the company in 2021 is in line with expectations as a whole, in which the revenue is at the upper limit of the performance forecast, and the net profit attributable to the parent and the net profit attributable to the parent after deduction are at the median of the performance forecast. From the perspective of cash flow, the net cash flow generated by the company’s operating activities in 2021 was RMB 991 million, a year-on-year decrease of 24.77%.
2. The revenue of security business slowed down and the cloud business maintained a high growth
In 2021, the company realized revenue of security business, cloud computing business and wireless business of RMB 3.689 billion, 2.379 billion and 737 million respectively, with a year-on-year increase of 10.15%, 49.53% and 42.15%, and the corresponding revenue accounted for about 54%, 35% and 11%. Among them, the growth of security business income slowed down, and the cloud business income continued to increase.
3. Short term profit fluctuation caused by income structure adjustment and early strategic investment
The net profit margin of the company in 2021 is about 4%, which is significantly lower than that in 2020. We think it is mainly caused by two reasons: 1) the adjustment of income structure, the proportion of cloud business increases, and the gross profit margin of cloud business is lower than that of security business; 2) In the early stage of strategic investment, the company’s R & D and sales expenses in 2021 increased by 38.34% and 27.91% respectively year-on-year.
4. Looking forward to 2022, keep optimistic about the company’s performance
Looking forward to 2022, we remain optimistic about the company’s business. The main considerations are as follows: 1) forward looking guidance for the business to improve, and the balance of contract liabilities in 2021 will increase by 60% year-on-year; 2) There is room for improvement in profitability. In the short term, the effect of 21q4 fee control has initially appeared; 3) The allocation of safety business resources has been consolidated. In 2022, the company will “strengthen the promotion of safety products and overall solutions, and promote the safety business back to the track of healthy development”.
Investment advice
According to the actual performance of the company in 2021 and taking into account the positive business outlook in 2022, we adjust the profit forecast. It is estimated that the revenue of the company from 2022 to 2024 will be RMB 8.506108.88/14.154 billion (the original 2022 / 2023 forecast is RMB 8.392/11.078 billion), and the net profit attributable to the parent company will be RMB 775/11.661662 million (the original 2022 / 2023 forecast is RMB 779 / 1202 million). Considering that the company’s short-term business fluctuations are expected to bring long-term strategic transformation to the good, maintain the “buy” rating
Risk tips: 1) the growth rate of cloud computing business is lower than expected; 2) Intensified market competition; 3) The epidemic has repeatedly affected order delivery and revenue recognition
